DATE: 20050808

DOCKET: C41333

COURT OF APPEAL FOR ONTARIO

RE:

RIVERSIDE DEVELOPMENTS BOBCAYGEON LTD., GORDON EDWARD WEYMOUTH and GORMAW DEVELOPMENTS LIMITED (Plaintiffs/Respondents) – and – THE CORPORATION OF THE VILLAGE OF BOBCAYGEON, JOHN PHELPS, SPRINGBANK HOMES LIMITED, DEWHURST BROS. CONSTRUCTION (BOBCAYGEON) LIMITED, BANK OF MONTREAL and CANADA MORTGAGE AND HOUSING CORPORATION (Defendants/Appellants)

BEFORE:

FELDMAN, GILLESE and LAFORME JJ.A.

COUNSEL:

Alan Lenczner Q.C. and Ryan Breedon

for the appellants

Geoffrey Adair Q.C.

for the respondents

HEARD:

July 18, 2005

On appeal from the judgment of The Honourable Mr. Justice Glass dated January 19, 2004.

E N D O R S E M E N T

[1] In this case the respondent built four rental buildings in Bobcaygeon. His contractor proposed plans, which he submitted to the municipality for approval and ultimately for a building permit. Those plans were approved by the Chief Building Officer Mr. Phelps, a building permit was issued, the buildings were constructed and they were inspected and approved by Mr. Phelps. After they were completed and occupied, it came to the attention of the parties that the buildings did not comply with the Building Code in the requirement for firewalls. As a result, the tenants vacated, the bank realized on its mortgage and suffered a shortfall. The owner was responsible for that shortfall and also lost all profits from its investment. At trial, the Town admitted liability for negligence in approving the plans, issuing the building permit and in inspecting the buildings as they were constructed. The town was found 100% responsible for the damages suffered by the owner.

[2] The appellant raises four issues on the appeal. The first is an error made by the trial judge in the amount of the award that has been corrected on consent in the judgment.

[3] The second error alleged is the decision of the trial judge not to order set-off of the amount of the judgment on the Banks’ mortgage, as the appellant took an assignment of that judgment from the bank.

[4] During the course of oral argument, issues arose regarding the proper amount of the mortgage judgment and the amount that would be set-off, if set-off were to be ordered. The parties agreed to obtain further details of this amount and to provide them to the court. We have now received the parties’ submissions. The parties have now agreed that the appellant is entitled to set off the full amount of the assigned mortgage liability. The amount is corrected from the original judgment to $3,416,261.14 plus pre-judgment interest.

[5] The third issue raised by the appellants is the respondent owners’ own responsibility for the error in the plans that caused the problems with the buildings. The appellants make three submissions:

a) The contractor drafted the defective plans and applied for the building permit based on those plans as agent for the owner, making the owner responsible for the negligence of the contractor;

b) The trial judge erred in concluding that the owner and the contractor were not joint venturers on the project, and therefore on that basis, the owner was responsible for the negligence of the contractor;

c) As a matter of law, an owner has the primary responsibility vis-à-vis the municipality to ensure that the plans submitted for a building permit are correct, so that as a matter of law, the owner must bear some portion of the liability on that basis of contributory negligence.

[6] The respondents’ main answer to these arguments is that there was no evidence led at the trial, including expert evidence, that any action by the contractor in preparing and submitting the plans to the municipality fell below the standard of care of a contractor in Bobcaygeon. Therefore, there was no basis upon which the trial judge could have apportioned any liability to the contractor for which the owner could have been responsible as agent or as joint venturer. We agree with that submission.

[7] The trial judge made a specific finding, after considering all the evidence, that the owner and the contractor were just that, and were not partners or joint venturers in this project. That finding is one of mixed fact and law. The trial judge made no palpable and overriding error in reaching that conclusion.

[8] We are satisfied that the statements made by the court in the case of Ingles v. Tutkaluk Construction Ltd. (2000), 2000 SCC 12, 183 D.L.R. (4th) 193 S.C.C. regarding the primary responsibility of an owner/builder for the plans were made in the context of a contest regarding apportionment, and not as a statement of law applicable regardless of the evidence presented.

[9] We would not give effect to this ground of appeal.

Conclusion

[10] The appeal on the issue of contributory negligence is dismissed.

[11] The judgment will be amended in accordance with the agreement of the parties as set out in counsels’ letter of July 28, 2005.

[12] Costs of the appeal to the respondent on the partial indemnity scale fixed at $30,000 inclusive of disbursements and GST.

“K. Feldman J.A.”

“E.E. Gillese J.A.”

“H.S. LaForme J.A.”